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Archive for the ‘Ponzi Scheme’ Category

Global Ponzi scheme metaphor of the month

Monday, November 9th, 2009

The California Highway Patrol say a man stole a car to make a court appearance on a previous auto theft charge.

Patrol investigator Chris Linehan says he arrested Samuel Botchvaroff Tuesday as he sat inside a stolen 2000 Range Rover at the Vallejo courthouse. The 24-year-old Botchvaroff had just left his arraignment on auto theft charges stemming from an Oct. 31 arrest.

Linehan said the Range Rover’s LoJack system helped him locate the vehicle, which had been stolen from Oakland earlier Tuesday morning.

Authorities say Botchvaroff told officers his car had been impounded, and he had no other way to get to his arraignment.

He was booked into Solano County Jail on suspicion of auto theft and possession of stolen property.

Okay it doesn’t have a lot to do with global warming directly, but for some reason, when I first read the story, I immediately thought of this:  “Is the global economy a Ponzi scheme?

Obama at MIT: “From China to India, from Japan to Germany, nations everywhere are racing to develop new ways to producing and use energy. The nation that wins this competition will be the nation that leads the global economy. I am convinced of that. And I want America to be that nation…. There are going to be those who make cynical claims that contradict the overwhelming scientific evidence when it comes to climate change, claims whose only purpose is to defeat or delay the change that we know is necessary.”

Friday, October 23rd, 2009

The naysayers, the folks who would pretend that this is not an issue, they are being marginalized. But I think it’s important to understand that the closer we get, the harder the opposition will fight and the more we’ll hear from those whose interest or ideology run counter to the much needed action that we’re engaged in. There are those who will suggest that moving toward clean energy will destroy our economy — when it’s the system we currently have that endangers our prosperity and prevents us from creating millions of new jobs.

As always, if you want to hear the best progressive messaging on energy and climate — if you want to know the best phrases and framing — look no further than the master messenger in the Oval Office.  This time, Obama spoke at my alma mater, the Massachusetts Institute of Technology (full text here — I’ll have the YouTube video up soon).

Like no President before him — indeed, like no major U.S. politician since Robert F. Kennedy — he has stated again and again that our current path is unsustainable and doomed to fail, using language very similar to the global economy is a Ponzi scheme metaphor:

  • “I want us all to think about new and creative ways to … encourage young people to create and build and invent — to be makers of things, not just consumers of things.” (4/27)
  • “The choice we face is not between saving our environment and saving our economy. The choice we face is between prosperity and decline.” (4/22)
  • “We cannot rebuild this economy on the same pile of sand.”  (4/14)
  • “We can let the jobs of tomorrow be created abroad, or we can create those jobs right here in America and lay the foundation for our lasting prosperity.” (3/19)

Those in the media and elsewhere who don’t think Obama will use all the power of his office to get a comprehensive climate and clean energy bill on his desk next year are simply not listening to him.

This speech is a good bookend to his UN speech on climate change.  Interestingly, if the Senate does not finish its work in time for a vote this year, the vote would be in late January or early February — so Obama would probably talk about clean energy and global warming in the State of the Union address!

The whole speech is worth reading:

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“The era of procrastination, of half measures, of soothing and baffling expedience of delays, is coming to its close. In its place we are entering a period of consequences.”

Wednesday, September 16th, 2009

“They go on in strange paradox, decided only to be undecided, resolved to be irresolute, adamant for drift, solid for fluidity, all-powerful to be impotent…  Owing to past neglect, in the face of the plainest warnings, we have entered upon a period of danger.  The era of procrastination, of half measures, of soothing and baffling expedience of delays, is coming to its close.  In its place we are entering a period of consequences….  We cannot avoid this period, we are in it now…”

Winston Churchill, November 12, 1936

Paul Gilding, former executive director of Greenpeace International, has another piece I’m reposting, “The Parallel Universes of Climate Change. Where do you live? You may remember Gilding from Tom Friedman’s Ponzi scheme column (see here).

Some days my head hurts, as I shift between what feels like two parallel universes in the climate change debate. First I have these conversations with world-class scientists who calmly lay out the scientific view of the various risks posed by climate change and their relative scale and likelihoods. They tell me the science says it is almost certain the impacts will be serious and destabilising for our society and our economy. The science also describes a lower level of risk – which they find hard to quantify but generally say between 10% and 50% – that the impacts of climate change will be catastrophic, perhaps even civilisation threatening. This could include widespread famine, war and economic collapse. Not certain, but a reasonable possibility.

It is very clear when you listen to these scientists and read their peer-reviewed reports that, on any calm and rational analysis, we should be preparing for a carbon reduction war. Yes, a war – with all that implies about focus, effort and sacrifice. The threat posed is, after all, a “clear and present danger” and the response should be strong, global and immediate. This should be a ‘whatever it takes’ moment.

Then I shift into the parallel universe.

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Labor Day, 2029: When the global Ponzi scheme collapses, the only jobs left will be green — but what should you study now to be employable then?

Monday, September 7th, 2009

http://www.ebooknetworking.com/books/158/008/big1580089305.jpgI’m spending a few days in Elizabethtown College next week as a Woodrow Wilson Visiting Fellow.  One of the talks I’ve proposed is “Job Security in a Globally Warmed World: What you need to study to be employable in 2020 and 2040.”

Perhaps the talk title should be “What Color is Your Parachute?  It better be some shade of green.”

I’d welcome your thoughts, since this is a tricky issue.  For instance, will we be desperate for more marine biologists — or will that job be an oxymoron in a few decades (see “Imagine a World without Fish“)?

One clear piece of advice — don’t plan on being part of the U.S. airline industry.  It has never been profitable and has no business model for oil at $150 a barrel, let alone $200 or higher, which is what we face in 2020 and beyond (see World’s top energy economist warns “We have to leave oil before oil leaves us”).  On the other hand, the clean energy and water efficiency business will boom.  True, doctors specializing in diabetes and obesity will be in demand, but let’s keep the focus to job market changes driven by energy and climate.

Air conditioning repair, yes, ski instructor, no.  Forest fire fighter, yes, gardener in the desert Dust Bowl Southwest, not so much.

To help imagine Labor Day 20 years from now, let me revise my earlier piece, “When the global Ponzi scheme collapses (circa 2030), the only jobs left will be green.”

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Is the U.S. consumption binge over? NYT reports “Sales of vegetable plants swelled fivefold in March over past years.”

Tuesday, September 1st, 2009

I noted a while back that the U.S. savings rate was on the rise, that it looks like U.S. carbon dioxide emissions peaked in 2007, that President Obama was making a big push toward making America a nation of creators as opposed to consumers, and asked in May,0 “Is the U.S. consumption binge over?”  Well, I’m asking again:

Have you personally seen evidence of permanent behavior shifts or is this is just a small speed bump on the Autobahn to oblivion.

On Friday, a NYT piece, “Reluctance to Spend May Be Legacy of Recession,” made some similar points:

The Great Depression imbued American life with an enduring spirit of thrift. The current recession has perhaps proven wrenching enough to alter consumer tastes, putting value in vogue.

“It’s simply less fun pulling up to the stoplight in a Hummer than it used to be,” said Robert Barbera, chief economist at the research and trading firm ITG. “It’s a change in norms.”

Of course, it’s a long way from Hummers to John Stuart Mill’s “Stationary State.”  Also, the “the savings rate dipped to 4.2% from 4.5% in June and from 6.0% in May,” and even the 6.0% was only a blip to the 50-year average (the figure below is the 3-month centered average of the personal savings rate).

Still, the NYT notes:

On Friday, the Commerce Department said spending rose 0.2 percent in July from the previous month. But most economists see this activity as short-lived, pointing out that incomes did not rise. Some suggest the recession has endured so long and spread pain so broadly that it has seeped into the culture, downgrading expectations, clouding assumptions about the future and eroding the impulse to buy.

And the piece offers this interesting factoid about gardening:

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Coal mining costs Appalachians five times more in early deaths than it provides in economic benefits

Monday, June 22nd, 2009

Bill Becker discusses a recent study that provides one more example of the Ponzi scheme our U.S. economy is built on. See also “The day ‘clean coal’ died” and “Second TVA coal ash pond ruptures — at Widows Creek coal plant.”

The Appalachian region has been supplying American with cheap energy for generations, a duty it has performed with a sense of pride and patriotism. But while electricity from the region’s coal has been cheap for the rest of us, the price has been extraordinarily high for the people of the mountains.

That price took on a new dimension this week in a peer-reviewed study (subs. req’d) from the Health Policy Institute at West Virginia University. Researcher Michael Hendryx reports that coal mining costs the region five times more in early deaths than it provides in economic benefits.

Hendryx’s sobering calculation is that the coal industry provides about $8 billion annually in jobs, taxes and other economic benefits — but premature deaths attributed to coal mining and its impacts, including local air and water pollution, cost the region $42 billion.

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Robert F. Kennedy challenged our Ponzi scheme pursuit of growth for growth’s sake, much as his heir, Barack Obama, does

Saturday, June 13th, 2009

http://www.northernsun.com/images/imagethumb/%20Growth%20For%20Growth%20Sake%20Button%20(0400).jpgRobert F. Kennedy was assassinated 41 years ago last week.  He challenged our monomaniacal pursuit of GDP in “one of the most beautiful of his speeches,” as Obama described it an August 2008 NYT profile of his economic thinking.

Obama is one of the few major politicians who constantly challenges our unsustainable economic worldview today (see “Obama gets the Ponzi scheme“).  Let’s listen to RFK’s remarkable words and then Obama’s:

Here is the transcript:

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Memorial Day, 2029

Monday, May 25th, 2009

resource_wars_cover.jpgThe two worst direct impacts to humans from our unsustainable use of energy will, I think, be Dust-Bowlification and sea level rise, Hell and High Water.  But another impact — far more difficult to project quantitatively because there is no paleoclimate analog — may well affect far more people both directly and indirectly than either of those:  war, conflict, competition for arable and/or habitable land.

We will have to work as hard as possible to make sure we don’t leave a world of wars to our children.  That means avoiding centuries of strife and conflict from catastrophic climate change.  That also means finally ending our addiction to oil, a source — if not the source — of two of our biggest recent wars.  I reported in back September:

An intelligence forecast being prepared for the next president on future global risks envisions a steady decline in U.S. dominance in the coming decades, as the world is reshaped by globalization, battered by climate change, and destabilized by regional upheavals over shortages of food, water and energy.

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Is the U.S. consumption binge over?

Thursday, May 14th, 2009

It looks like U.S. carbon dioxide emissions peaked in 2007. But are we really seeing the start of an even more fundamental change in the U.S. economy, driven by the hyper-recession, team Obama and other major trends (like peak oil and global warming)?

I’m very interested in what you are seeing and hearing from your friends and neighbors as well as what you think at the macro level.

The economic downturn is forcing a return to a culture of thrift that many economists say could last well beyond the inevitable recovery.

So began a front-page NYT story this week.  With the huge recent devaluation of two key retirement assets — houses and 401ks — thrift is the word of the day and the year and maybe much longer:

I expect that the savings rate will end up at the end of this recession higher than it was going into it,” said Jonathan A. Parker, a finance professor at the Kellogg School of Management at Northwestern University. “It’s hard to see how it wouldn’t.”

But this isn’t just about spending less and saving more.

This is about a shift to a form of consumption that is based on renewable resources, that doesn’t destroy the planet’s livability — a sustainable economy, not a Ponzi scheme.

Here is where Obama comes in.  His stimulus package and first 100 days were the biggest push away from dirty energy in U.S. history, accelerating a massive transition to clean, safe sources of energy that never run out!  It is a key reason CO2 emissions have probably peaked.

In his big speech on science and R&D last month — “Our future on this planet depends on our willingness to address the challenge posed by carbon pollution,” vows “we will exceed [R&D] level achieved at the height of the space race.” — Obama took direct aim at a purely consumption-based economy:

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Ponzi redux: Scientific American asks “Could Food Shortages Bring Down Civilization?”

Friday, May 1st, 2009

We desperately need a new way of thinking, a new mind-set. The thinking that got us into this bind will not get us out. When Elizabeth Kolbert, a writer for the New Yorker, asked energy guru Amory Lovins about thinking outside the box, Lovins responded: “There is no box.”

There is no box. That is the mind-set we need if civilization is to survive.

It’s not news that Lester Brown is warning about our unsustainable approach to feeding the planet.  But it is news that Scientific American has run a major article by him on how “The biggest threat to global stability is the potential for food crises in poor countries to cause government collapse.”

Brown’s “Key Concepts”:

  • Food scarcity and the resulting higher food prices are pushing poor countries into chaos.
  • Such “failed states” can export disease, terrorism, illicit drugs, weapons and refugees.
  • Water shortages, soil losses and rising temperatures from global warming are placing severe limits on food production.
  • Without massive and rapid intervention to address these three environmental factors, the author argues, a series of government collapses could threaten the world order.

Brown’s warnings, ignored for too long, are now being repeated at the highest levels.  For instance, I previously blogged on the UK government’s chief scientist, Professor John Beddington, who laid out something very close to this collapse scenario in his speech yesterday to the government’s Sustainable Development UK conference in Westminster (see “When the global Ponzi scheme collapses (circa 2030), the only jobs left will be green“):

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Play the Earth Day game sweeping the nation — That’s Unsustainable!

Wednesday, April 22nd, 2009

What is the most unsustainable activity you have ever seen?

So I was taking my daughter upstairs last night when I happened to look outside the window and saw a “Mobile Grooming Salon” for dogs and cats.  The big tricked out van looked something like this:

Anyway, while I suppose this could conceivably save the energy of individual pet owners each driving to a salon in a world of overconsumption and cheap gasoline, I don’t think I saw this van in my copy of The Transition Handbook: from oil dependency to local resilience [which I just started reading and will blog on eventually].  Though it does occur to me just now that this van could easily be replaced by a plug-in hybrid in the near future, and essentially always stay charged up as it moved from home to home.  Hmm.  Would that make it sustainable, assuming the grid goes low-carbon?

Anyway, it reminded me of my earlier post “What is the most unsustainable piece of junk you own?

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Obama gets the Ponzi scheme: “The choice we face is not between saving our environment and saving our economy. The choice we face is between prosperity and decline.”

Wednesday, April 22nd, 2009

President Obama spoke at a wind tower production facility in Iowa today.  It was another brilliant speech underscoring his commitment to climate action and the clean energy transition.

Like no President before him — indeed, like no major U.S. politician — he has stated again and again that our current path is unsustainable and doomed to fail, using language very similar to the global economy is a Ponzi scheme metaphor.

  • “We cannot rebuild this economy on the same pile of sand.” (4/14)
  • “We can let the jobs of tomorrow be created abroad, or we can create those jobs right here in America and lay the foundation for our lasting prosperity.” (3/19)

His speech today was equally blunt and equally visionary — testimony to the fact that the best messaging on this subject has both the positive vision of the future if we change our path and the painful reality facing us if we don’t.

And don’t miss his extended discussion at the end about “closing the carbon loophole through this kind of market-based cap” and trade system.  Anyone who thinks President Obama is not serious about passing a climate bill in the next year or so, that he is somehow softening on his campaign commitment, is simply not paying attention:

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The one debt we must not leave our children

Monday, March 23rd, 2009

[CP's Bill Becker adds his perspective on the current climate debate in DC and on the conservatives who fight action at any cost, including the health and well-being of future generations. While you read this, ignore the conservative revisionism that the New Deal prolonged the Depression and did not stimulate the economy. In fact, historian Eric Rauchway notes "Excepting 1937-1938, unemployment fell each year of Roosevelt's first two terms [while] the U.S. economy grew at average annual growth rates of 9 percent to 10 percent.” What happened those two years? As Nobel-winning economist Paul Krugman has noted, in 1937-38, FDR “was persuaded to balance the budget” by fiscal conservatives and “cut spending and the economy went back down again” (see here).]

Growing National Debt

It’s time for a reality check in the contentious debate over the investments President Obama has proposed to fight global climate change and build a new energy economy.

As Ken Burns once put it, “we need a little more Pluribus and a little less Unum” in the United States these days. Instead, a newly outraged Outrage Class is firing bullets made of silly putty, hoping some will stick to the new President.

Here are some prominent current examples:

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Climate competitiveness 2: When the global Ponzi scheme collapses (circa 2030), the only jobs left will be green

Friday, March 20th, 2009

In Why the United States REQUIRES a strong climate bill to remain competitive, Part 1, I reprised the thesis first documented by Harvard’s Michael Porter — strong, leading edge, pro-innovation regulations promote national competitiveness. As President Obama said yesterday:

We can let the jobs of tomorrow be created abroad, or we can create those jobs right here in America and lay the foundation for our lasting prosperity.

It is Obama’s final point — “lasting prosperity” — that is the focus of this post. Obama is hinting at a point I tried to make explicit with last week in my interview with NYT’s Tom Friedman and subsequent post (see “Is the global economy a Ponzi scheme“):

“We created a way of raising standards of living that we can’t possibly pass on to our children,” said Joe Romm.

To perpetuate the high returns the rich countries in particular have been achieving in recent decades, we have been taking an ever greater fraction of nonrenewable energy resources (especially hydrocarbons) and natural capital (fresh water, arable land, forests, fisheries), and, the most important nonrenewable natural capital of all — a livable climate.

In short, we have failed to designed a system capable of lasting prosperity. Quite the reverse.

Like all Ponzi schemes, the system must collapse. When it does, the only jobs left standing will be those that are “green” — which can be defined as those jobs that do not plunder nonrenewable energy resources and natural capital and/or do not to destroy a livable climate.

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Neil Young sings of the Ponzi scheme: “There’s a bailout coming, but it’s not for you” and “Keep on blogging ’til the power goes out” and

Saturday, March 14th, 2009

neil-young.jpg

I am forced to admit that the Neil Young fan in the family is my wife. But who can’t love a guy who going release in April an entire concept album on electric cars. The picture is of Young with his ‘59 Lincoln, which has been converted to an electric hybrid, the Linc-Volt (video here, info here).

You can watch a video of his new single, “Fork in the Road” (here), with the great chorus, “There’s a bailout coming, but it’s not for you.” And it has a lyric that will be CP’s unofficial new tagline: “Keep on blogging ’til the power goes out.”

So perhaps it’s not a surprise that on Thursday, Neil Young News wrote a post, “The secret is now out: We’ve got a job to do” about Shakey the eco-visionary, the Friedman piece, and CP:

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Ponzi 4: Former GE Chief Jack Welch says obsession with short-term profits, share price gains was “Dumb Idea”

Friday, March 13th, 2009

File this one under “now they tell us” or maybe “the former drug kingpin says crack is not healthy for you.” The Financial Times reports the shocking not-quite-deathbed conversion:

Jack Welch, who is regarded as father of the “shareholder value” movement, has said the obsession with short-term profits and share price gains that has dominated the corporate world for over 20 years was “a dumb idea”….

“On the face of it, shareholder value is the dumbest idea in the world,” he said. “Shareholder value is a result, not a strategy … your main constituencies are your employees, your customers and your products.”

Uhh,”your products,” Jack? Still, an amazing statement and 2 out of 3 aren’t bad.

I realize this is not the same as Jack denouncing the whole system as a Ponzi scheme (see “Is the global economy a Ponzi scheme, are we all Bernie Madoffs, and what comes next? Part 1). It’s not like he said “your main constituencies are your employees, your customers and the next generation.”

But escaping the Ponzi scheme requires a massive national and global investment in the trifecta of energy efficiency, cogeneration, and renewable energy (see “An introduction to the core climate solutions“). And that requires companies to make investments maximizing long-term profits and minimizing lifecycle costs — not maximizing short term profits and minimizing first costs.

Having spent a decade working with leading businesses on greenhouse gas mitigation strategy, helping (many of) them to adopt energy efficiency, renewable energy, and cogeneration technologies, I can attest that the single biggest reason senior company executives and corporate energy managers turned down even highly profitable investments was the companies’ obsession with short-term profits. (more…)

NPR has Paul Gilding on The Great Disruption, Romm on The Great Ponzi Scheme

Wednesday, March 11th, 2009

[For those who have the time, I'd certainly be interested in feedback on my remarks.]

The folks at the NPR show “On Point,” read Friedman’s column in which he quoted Gilding and me (see “Is the global economy a Ponzi scheme, are we all Bernie Madoffs, and what comes next? Part 1“).

So if you click here, you can listen to an hour interview starting with

Paul Gilding, former executive director of Greenpeace International and founder of the environmental consulting firm ECOS. He’s now an independent writer, advisor and advocate for issues of sustainability and climate change. He first wrote about the idea of a “Great Disruption” in 2005.

I come on about halfway through, but this is really the first time I have ever elaborated on the Ponzi scheme notion in a talk or interview — so I’d be interested in any feedback.

But Gilding has been explaining his perspective for a number of years, so he is well worth listening to, I think.

Ponzi 3: What is the most unsustainable piece of junk you own?

Tuesday, March 10th, 2009

zapper.jpg

An unusually unsustainable device that I own (see below).

I’m hoping to expand on the Ponzi scheme discussion in my next Salon piece. So I’m gathering examples of unsustainability at every scale.

In asking what is the most unsustainable piece of crap junk you own, I wasn’t really thinking private jet or Hummer, not that I think any of you own that uber-unsustainable stuff.

Nor was I thinking of an electric dryer, since most people (in this country) own that laborsaving device. But that does get us closer to the key question, though: How many of the 10 billion people on the planet post-2050 will be using large amounts of electricity for things that are easily done without electricity — once we have moved beyond desperation and are actually in the midst of the climate catastrophe.

By junk I was thinking of something closer to a relatively superfluous device that symbolizes the Ponzi scheme we have created. What comes to mind at the moderate cost level is a leaf blower and even a Segway [sorry, Dean Kamen -- your genius is really needed urgently for sustainability, not for electrifying human walking, even if many people find some value in that]. I don’t own either of those, but I do own a treadmill and a 50-inch flat panel TV (but hey it is Energy Star), which are close to what I have in mind in this post.

And I’d also be interested in hearing about any of the truly pointless low-cost stuff you have, like an electric pencil sharpener. Indeed, what really got me thinking about all this yesterday was my use of a gadget (pictured above) whose pointlessness and unsustainability simply staggers the imagination:

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Ponzi 2: What year will coastal property values crash?

Monday, March 9th, 2009

[JR: Please Digg this post by clicking here.]

Coastal property values won’t wait to (permanently) fall until sea levels have actually risen 4 or 5 feet, as they almost certainly will by the end this century on our current CO2 emissions path (see Startling new sea level rise research: “Most likely” 0.8 to 2.0 meters by 2100 and Report from AGU meeting: One meter sea level rise by 2100 “very likely” even if warming stops?).

Coastal property values will crash when a large fraction of the financial community and of opinion-makers — along with a smaller but substantial fraction of the public — realize that it is too late for us to stop 4 to 5 feet of SLR. And remember, if we don’t get on the sustainable sub-450-ppm path soon, then people will quickly come to understand that SLR won’t stop in 2100. Seas will continue rising post-2100 perhaps 10 to 20 inches a decade (or more) for centuries until we are ice free and seas are 250 feet higher. And that makes protecting most coastal cities very, very difficult and expensive.

One of the points of my post “Is the global economy a Ponzi scheme and what comes next? Part 1,” of course, is that we haven’t hit that critical mass of knowledge yet. If we had, the world would be engaged in a massive, desperate effort to avert catastrophe.

And so I pose the question in my talks: What year will coastal property values crash?

I am certainly interested in your thoughts on this.

I pose the question mostly to stimulate thinking. And certainly the collapse is unlikely to happen in just one year — so perhaps the better question is, What year will U.S. coastal property values peak?

I tend to think the peak comes some time in the 2020s.

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Gates Foundation strategy raises key question: Can the problems of the developing world be solved by ignoring global warming?

Monday, March 9th, 2009

Environment and ScienceSalon has published my article on the biggest flaw in the strategy of the Bill and Melinda Gates Foundation. I’m going to expand on that article in a two-parter here.

The timing could not be better with the Tom Friedman “Ponzi scheme” discussion. For while the the richest foundation in the world certainly has taken on the noblest and greatest of challenges — to help billions of people who “never even have the chance to live a healthy, productive life” reach that opportunity themselves — its efforts are ultimately doomed to fail if we don’t stop catastrophic warming.

Also, the two men who have donated much of their vast wealth to make it possible, Bill Gates and Warren Buffet, are Exhibits One and Two of the “very serious people who are perceived as essentially nonpartisan opinion leaders” who must speak out on climate change if we are to avert the worst (see “Is 450 ppm (or less) politically possible? Part 7: The harsh lessons of the financial bailout “).

Yet when we saw them together last summer, they were touring the Ponzi Canadian tar sands, as The Calgary Herald reported (see here):

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